Bankers and investors around the world have started to express concern about the rapidly inflating stock market bubble, and its future impact on the world economy. You can add Tiger Management co-founder Julian Robertson to that list.
Robertson appeared on CNBC with Kelly Evans and unequivocally called the stock market a bubble. Not only that, he said it was the Federal Reserve’s fault.
The US national debt officially topped $20 trillion after Pres. Trump signed a bill temporarily raising the debt ceiling limit for the next three months. With his signature, Trump increased the statutory debt by about $318 billion. That raised the US national debt to $20.16 trillion. The debt has increased about $215 billion from around $19.94 trillion since Trump took office.
Ron Paul says the whole debt ceiling issue raises even more fundamental questions about the role of government.
President Trump wants to scrap the debt ceiling. A lot of pundits and politicos think this is a great idea. Just scan through the mainstream media reporting and you’ll see headlines like this one from New York Magazine. “Trump Wants to Eliminate the Debt Ceiling. He’s Right.”
Peter Schiff sees this whole thing in a different light. He believes eliminating the debt ceiling will just push us more quickly down the road to the mother of all dollar bear markets.
Peter built the case for a dollar crash in his most recent Schiff Report video.
During the interview, Peter made some observations about gold that go a bit against the conventional narrative.
As gold finally pushed through the $1,300 resistance level , most analysts viewed it a direct result of geopolitical tensions, especially North Korea’s continuing belligerence. That’s certainly a factor, but Peter made a pretty strong case that gold’s strength isn’t primarily due to safe-haven buying. It’s about monetary policy.
The economy is essentially the same as it was under President Obama. The big difference is how President Trump is spinning it.
During a recent interview, Joe Rogan interspersed Peter Schiff’s comments with clips of Trump before and after the election. The resulting video vividly illustrates the difference between Trump the candidate and Trump the president. Peter said candidate Trump was telling the truth.
That’s what’s really bothering me about Trump is the hypocrisy, because when Trump was a candidate and he got elected because by and large he told the truth about the phony nature of the recovery. Obama was out there talking about how great things were, and Trump was like BS, it’s not that great.”
A “put” is an option that gives the owner the right, but not the obligation, to sell a specific amount of an asset such as a stock at a set price within the specified time. During a recent interview on The Street, Peter Shchiff used the “put” to describe Federal Reserve chair Janet Yellen’s control over the US stock market.
The host opened the show talking about how the stock market recovered after the recent sell-off, but Peter didn’t share his optimism, saying he wouldn’t buy US stocks even if everybody thinks they’re going up. He said, “there’s certainly not enough upside potential to justify the downside risk” thanks to the Federal Reserve and the likely expiration of the “Yellen put.”
The real risk here is this market could go down a lot. We could have a bear market. We haven’t had one in a long time. That’s a 20% decline. Because we’ve had this ‘Yellen put,’ the Fed wouldn’t let the market go down when Obama was president. They certainly didn’t want it to go down before the election because they wanted to put Hillary Clinton into the Oval Office after Obama. So, they had the market’s back. There was this ‘put.’ But what if the put expired with Donald Trump? I don’t know if the Fed has much love for Trump. And now that Trump has put his brand on this stock market and this economy, maybe the Fed is happy to allow a bear market that can be blamed on Trump.”
An Australian economist who predicted the 2008 financial crisis now says another crash is “almost inevitable.”
Steve Keen heads the economics department at Kingston University in London. He was one of the few academics to anticipate the subprime housing crisis. On his advice, French investment bank BNP Paribas announced it was shutting down three investment funds specializing in the US subprime market in 2007. At the time, the bank said it was struggling to calculate their values against a backdrop of growing concerns over liquidity.
In an interview on RT’s Keiser Report, Keen said another crisis is around the corner, and the problem this time is debt.
Gold hit two-month highs this week as investors seek safe-haven amidst increasing geopolitical tensions. Pres. Trump promised “fire and fury” if North Korea continues its threatening posture. Meanwhile, relations with Russia continue to deteriorate.
During an interview on RT, Peter Schiff said world tensions and the weak dollar should be playing an even larger role in pushing up the price of gold than they have been. Given the dollar has tanked this year, gold has really not strengthened very much. But Peter went on to say he thinks people will begin to embrace gold – although not for the reasons you might think. He didn’t focus on the current geopolitical brouhaha now in the news cycle, but instead emphasized we should be watching the Federal Reserve and central bank policy.
For the last several weeks, Peter Schiff has been saying President Trump is making a mistake by taking credit for the surging stock market because fundamentals don’t support the bull run. He’s warned that the president has set himself up and the Federal Reserve will use him as the fall-guy when the inevitable crash comes.
On Tuesday, Peter took the message onto Fox Business and faced off against former Trump campaign operative Steve Cortes. Fireworks erupted when Peter said Trump looks like a hypocrite when he tries to take credit for an improving economy.
Debt in the US is the mother of all bubbles.
The US government is more than $20 trillion in debt, with actual unfunded liabilities pushing far higher. Meanwhile, American families have amassed more than $1 trillion in credit card debt alone.
During a speech at Cambridge House IMWC earlier this summer, Peter Schiff discussed the massive levels of government, corporate, and personal debt in the US and how it will eventually take the air out of America’s bubble economy.
Peter starts the speech by showing the economy isn’t nearly as great as the mainstream pundits claim. He highlights the massive levels of debt, how the government manipulates employment numbers, and the very real problem of inflation. Then he shows how Federal Reserve policy has gotten us into this predicament and the choice it will ultimately be forced to make. Peter says in the end, the Fed will sacrifice the dollar.